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U.K. stocks moved lower Wednesday, erasing part of this week’s advance, as traders focused on trade-related tensions and the conflict in Syria.
Tesco PLC helped keep the FTSE 100 benchmark’s losses in check, with the supermarket operator’s shares jumping after its results.
How markets are moving
The FTSE 100 UKX, -0.20% fell 0.2% to 7,256.10, but remained up for the week, with a gain of 1%.
The pound GBPUSD, +0.1622% traded at $1.4216, rising from $1.4177 late Tuesday in New York.
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What’s driving markets
Worries about a global trade war have persisted for weeks. While the Trump administration exempted most countries from recent U.S. tariffs on imports of steel and aluminum, its targeting of Chinese goods has fanned fears.
Yet concerns appear to be ebbing this week, thanks to a less-aggressive stance on trade taken by Chinese President Xi Jinping in a key speech Tuesday.
Read: How China’s Xi, without blinking on trade, got the stock market to cheer
And see: Here’s how a ‘trade skirmish’ could become a global ‘trade war’
In a fresh geopolitical concern for investors, the possibility of a U.S. strike against Syrian President Bashar al-Assad appeared to be growing, with President Donald Trump and his administration working to rally international support. Talk of such a strike has been simmering since a suspected chemical-weapons attack killed civilians in Damascus over the weekend.
What strategists are saying
Some measures mentioned by Xi could take a long time to become reality, “if they can even be delivered at all,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note. “For equity markets to regain a sense of equilibrium, we need to start to see progress on the road away from a potential trade war, and currently there is no evidence of that whatsoever.”
That could be why stock markets are showing some softness, Hewson added.
Stock movers
Tesco shares TSCO, +5.42% climbed 4.6% for one of the FTSE 100’s biggest gains after the U.K.’s No. 1 grocer by market share declared its first year-end dividend in four years and said that its pretax profit increased multifold.
Evraz PLC shares TSCO, +5.42% — a steel and mining company with operations in Russia but London headquarters — jumped 4.8% but remained down 10% for the week. Stocks with Russian links have been taking it on the chin this week after fresh U.S. sanctions announced on Friday that targeted Russian individuals and entities.
Check out: Russia ETFs tumble after sanctions
Off the FTSE 100, Asos PLC shares ASC, -4.52% tumbled 10% after the online clothing retailer said total capital expenditure is set to increase. The company also said pretax profit for the first half of fiscal 2018 rose 10% as the number of visits to its website exceeded 1 billion for the first time.
Economic data
February reports on U.K. industrial production and merchandise trade are due at 9:30 a.m. London time, or 4:30 a.m. Eastern Time.